{"id":61242,"date":"1964-05-08T00:00:00","date_gmt":"1964-05-07T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/shivagouda-ravji-patil-and-others-vs-chandrakant-neelkanth-sedalge-on-8-may-1964"},"modified":"2015-07-14T16:50:47","modified_gmt":"2015-07-14T11:20:47","slug":"shivagouda-ravji-patil-and-others-vs-chandrakant-neelkanth-sedalge-on-8-may-1964","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/shivagouda-ravji-patil-and-others-vs-chandrakant-neelkanth-sedalge-on-8-may-1964","title":{"rendered":"Shivagouda Ravji Patil And Others vs Chandrakant Neelkanth Sedalge … on 8 May, 1964"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Shivagouda Ravji Patil And Others vs Chandrakant Neelkanth Sedalge … on 8 May, 1964<\/div>\n
Equivalent citations: 1965 AIR 212, \t\t 1964 SCR (8) 233<\/div>\n
Author: K Subbarao<\/div>\n
Bench: Subbarao, K.<\/div>\n
           PETITIONER:\nSHIVAGOUDA RAVJI PATIL AND OTHERS\n\n\tVs.\n\nRESPONDENT:\nCHANDRAKANT NEELKANTH SEDALGE AND OTHERS\n\nDATE OF JUDGMENT:\n08\/05\/1964\n\nBENCH:\nSUBBARAO, K.\nBENCH:\nSUBBARAO, K.\nAYYANGAR, N. RAJAGOPALA\nMUDHOLKAR, J.R.\n\nCITATION:\n 1965 AIR  212\t\t  1964 SCR  (8) 233\n\n\nACT:\nIndian Partnership Act-A minor admitted to the benefits of a\npartnership-Partnership\t  dissolved-Thereafter\t the   minor\nattains\t majority  He  did not exercise his  option  not  to\nbecome a partner-He cannot he adjudicated insolvent for\t the\nacts of insolvency of other partners Indian Partnership Act,\n1932 (IX of 1932), s. 30(5).\n234\n\n\n\nHEADNOTE:\nThe  respondent No.  1 while he was a minor was admitted  to\nthe  benefits of a partnership constituted of respondents  2\nand  3.\t The  partnership  owed\t a  certain  amount  to\t the\nappellants.  The partnership was dissolved and\tsubsequently\nrespondent No. 1 became a major but he did not exercise\t the\noption not to become a partner under s. 30(5) of the  Indian\nPartnership  Act, 1932.\t Respondents 2 and 3 committed\tacts\nof  insolvency and the appellants filed an  application\t for\nadjudicating the three respondents as insolvents.  The first\nrespondent  resisted the application without success but  on\nsecond appeal the High Court held that he was not a  partner\nof  the\t firm  and  hence he could  not\t be  adjudicated  an\ninsolvent for the debts of the firm.  The present appeal was\nfiled on a certificate granted by the High Court.\nThe  appellant\tcontended  before this Court  that  the\t 1st\nrespondent had become a partner of the firm by reason of the\nfact  that he had not elected to become a partner  under  a.\n30(5) of the Partnership Act and therefore he was liable  to\nbe adjudicated an insolvent.\nHeld:(i)  A  person under the age  of  majority\t cannot\nbecome\ta partner by contract and he cannot be one  of\tthat\ngroup  of persons called a firm.  It therefore follows\tthat\nif during minority of the 1st respondent the partners of the\nfirm  committed\t an act of insolvency, the minor  could\t not\nhave been adjudicated insolvent on the basis of the said act\nof  insolvency\tfor  the simple reason that  he\t was  not  a\npartner of the firm.\nSanyasi Charan Mandal v. Krishnadhan Banerji, (1922)  I.L.R.\n49 Cal. 560, relied on.\n(ii)It\tis implicit in the terms of sub-s. (5) of s. 30\t of\nthe  Partnership Act that the partnership is in\t existence,.\nA minor, after attaining majority, cannot elect to become  a\npartner of a firm which ceased to exist.  The entire  scheme\nof  s. 30 of the Partnership Act posits the existence  of  a\nfirm and negatives any theory of its application to a  stage\nwhen the firms ceased to exist.\n(iii)Since the 1st respondent became a major after  the\npartnersship was dissolved s. 30 of the Partnership Act does\nnot  apply  to\thim.  He is not a partner of  the  firm\t and\ntherefore he cannot be adjudicated insolvent for the acts of\ninsolvency committed by respondents 2 and 3, the partners of\nthe firm.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 244 of 1964.
\nAppeal from the judgment and order dated September 21,\t1962
\nof the Mysore High Court in Civil Revision Petition No.\t 929
\nof 1958.\n<\/p>\n
G.   S. Pathak and R. Gopalakrishnan, for the appellants.
\nS.   G.\t Patwardhan,  V.  Kumar\t and  Naunit  Lal,  for\t the
\nrespondent No. 1.\n<\/p>\n
235<\/span><\/p>\n
May, 8, 1964.  The Judgment of the Court was delivered by
\nSUBBA  RAO, J.This appeal by certificate raies the  question
\nwhether\t a  minor  who was admitted to\tthe  benefits  of  a
\npartnership  can  be adjudicated insolvent on the  basis  of
\ndebt  or  debts of the firm after the partnership  was\tdis-
\nsolved,\t on the ground that he attained majority  subsequent
\nto the said dissolution, but did not exercise his option  to
\nbecome a partner or cease to be one of the said firm.
\nThe  facts  are not in dispute and may\tbe  briefly  stated.
\nMallappa  Mahalingappa\tSadalge and  Appasaheb\tMahalingappa
\nSadalge, respondents 2 and 3 in the appeal, were carrying on
\nthe  business  of commission agents  and  manufacturing\t and
\nselling\t partnership  under the names of two firms  “M.\t  B.
\nSadalge” and “C.  N. Sadalge”.\tThe partnership deed between
\nthem  was  executed  on\t October 25,  1946.   At  that\ttime
\nChandrakant  Nilakanth Sadalge, respondent 1 herein,  was  a
\nminor\tand  he\t was  admitted\tto  the\t benefits   of\t the
\npartnership.\tThe  partnership  had  dealings\t  with\t the
\nappellants and it had become indebted to them to the  extent
\nof Rs. 1,72,484.  The partnership was dissolved on April 18,
\n1951.  The first respondent became a major subsequently\t and
\nhe  did not exercise the option not to become a\t partner  of
\nthe firm under s. 30(5) of the Indian Partnership Act.\tWhen
\nthe appellants demanded their dues, the respondents 2 and  3
\ninformed  them that they were unable to pay their  dues\t and
\nthat they had suspended payment of the debts.  On August  2,
\n1954,  the appellants filed an application in the  Court  of
\nthe  Civil Judge, Senior Division, Belgam, for\tadjudicating
\nthe three respondents as insolvents on the basis of the said
\ndebts.\t The  1st respondent opposed the  application.\t The
\nlearned Civil Judge found that respondents 2 and 3 committed
\nacts  of  insolvency and that the 1st  respondent  had\talso
\nbecome\t partner as he did not exercise his option under  s.
\n30(5)  of  the Partnership Act and, therefore, he  was\talso
\nliable\tto  be\tadjudicated  along  with  them.\t  The  first
\nrespondent  preferred an appeal to the District\t Judge,\t but
\nthe appeal was dismissed.  On second appeal, the High  Court
\nheld that the 1st respondent was not a partner of the
\n236<\/span>
\nfirm  and, therefore, he could not be adjudicated  insolvent
\nfor the debts of the firm.  The creditors have preferred the
\npresent appeal against the said decision of the High Court.
\nLearned\t counsel  for the appellants, Mr.  Pathak,  contends
\nthat the 1st respondent had become a partner of the firm  by
\nreason\tof the fact that he had not elected not to become  a
\npartner\t of  the firm under s. 30(5) of the  Patnership\t Act
\nand,  therefore, he was liable to be  adjudicated  insolvent
\nalong with his other partners.\n<\/p>\n
The  question  turns upon the relevant\tprovisions  of\tthe,
\nProvincial  Insolvency Act, 1920 (5 of 1920) and the  Indian
\nPartnership  Act.   Under the provisions of  the  Provincial
\nInsolvency  Act, a person can only be adjudicated  insolvent
\nif he is a debtor and has committed an act of insolvency  as
\ndefined\t in  the Act: see ss. 6 and 9. In the  instant\tcase
\nrespondents  2 and 3 were partners of the firm and they\t be-
\ncame indebted to the appellants and they committed an act of
\ninsolvency   by\t declaring  their  inability  to   pay\t the
\ndebts\t.and  they  were,  therefore,  rightly\t adjudicated
\ninsolvents
\nBut the question is whether the first respondent could\talso
\nbe  adjudicated insolvent on the basis of thE said  acts  of
\ninsolvency committed by respondents 2 and 3. He could be, if
\nhe  had become a partner of the firm.  It is contended\tthat
\nhe  had\t become a partner of the firm, because lie  did\t not
\nexercise his option not to become a partner thereof under s.
\n30(5)  of  the\tPartnership  Act.  Under  s.  30(1)  of\t the
\nPartnership  Act a minor cannot become a partner of  a\tfirm
\nbut  he\t may be admitted to the benefits of  a\tpartnership.
\nUnder  sub-ss. (2) and (3) thereof he will be entitled\tonly
\nto  have a right to such share of the properties and of\t the
\nprofits\t of  the firm as may be agreed upon, but he  has  no
\npersonal  liability  for any acts of the  firm,\t though\t his
\nshare is liable for the same.  The legal position of a minor
\nwho is admitted to a partnership has been succinctly  stated
\nby the Privy Council in Sanyasi Charan Mandal v. Krishnadhan
\nBanerji(1) after considering the material provisions of\t the
\nContract Act,
\n(1)[1922] I.L.R. 49 Cal. 560, 570.\n<\/p>\n
237<\/span><\/p>\n
which at that time contained the provisions relevant to\t the
\nlaw of partnership, thus :\n<\/p>\n
\t      “A  person  under the age of  majority  cannot
\n\t      become\t      a\t\t partner\t  by
\n\t      contract………………….\t and\t  so
\n\t      according\t to the definition he cannot be\t one
\n\t      of  that group of persons called a  firm.\t  It
\n\t      would seem, therefore, that the share of which
\n\t      s.  247  speaks  is no more than\ta  right  to
\n\t      participate in the property of the firm  after
\n\t      its obligations have been satisfied.”\n<\/p><\/blockquote>\n
It follows that if during minority of the 1st respondent the
\npartners  of  the firm committed an act of  insolvency,\t the
\nminor could not have been adjudicated insolvent on the basis
\nof the said act of insolvency for the simple reason that  he
\nwas  not a partner of the firm.\t But it is said that  sub-s.
\n(5) of s. 30 of the Partnership Act made all the  difference
\nin  the case.  Under that sub-section the quondam  minor  at
\nany time within six months of his attaining majority, or  of
\nhis  obtaining\tknowledge that he had been admitted  to\t the
\nbenefits  of partnership, whichever date is later, may\tgive
\npublic\tnotice that he has elected to become or that he\t has
\nelected not to become a partner in the firm and such  notice
\nshall  determine  his position as regards the firm.   If  he
\nfailed\tto give such a notice, he would become a partner  in
\nthe  said  firm after the expiry of the said period  of\t six
\nmonths.\t Under sub-s. (7) thereof where such person  becomes
\na partner, his rights and liabilities as a minor continue up
\nto  the\t date  on which he becomes a partner,  but  he\talso
\nbecomes\t personally liable to third parties for all acts  of
\nthe  firm  done\t since he was admitted to  the\tbenefits  of
\npartnership and his share in the property and profits of the
\nfirm shall be the share to which he was entitled as a minor.
\nUnder  the said two sub-sections, if during the\t continuance
\nof  the partnership a person, who was admitted at  the\ttime
\nwhen he was a minor to the benefits of the partnership,\t did
\nnot within six months of his attaining majority elect not to
\nbecome a partner, he would become a partner after the expiry
\nof the said period and thereafter his rights and liabilities
\nwould be the same as those of the other partners as from the
\ndate he was admitted to the partnership.\n<\/p>\n
238<\/span><\/p>\n
It  would follow from this that the said minor would  there-
\nafter  be  liable  to the debts of the\tfirm  and  could  be
\nadjudicated  insolvent for the acts of insolvency  committed
\nby  the partners.  But in the present case  the\t partnership
\nwas  dissolved before the first respondent became  a  major;
\nfrom  the  date of the dissolution of the  partnership,\t the
\nfirm  ceased  to exist, though under s. 45 of the  Act,\t the
\npartners continued to be liable as such to third parties for
\nthe acts done by any of them which would have been the\tacts
\nof  the\t firm if done before the  dissolution  until  public
\nnotice\twas  given of the dissolution.\tSection\t 45  proprio
\nvigore\tapplies\t only  to partners of the  firm.   When\t the
\npartnership itself was dissolved before the first respondent
\nbecame a major, it is legally impossible to hold that he had
\nbecome\ta  partner of the dissolved firm by  reason  of\t his
\ninaction after he became a major within the time  prescribed
\nunder  s. 30(5) of the Partnership Act.\t Section 30  of\t the
\nsaid  Act presupposes the existence of a partnership.\tSub-
\nss.  (1),  (2)\tand  (3) thereof  describe  the\t rights\t and
\nliabilities   of  a  minor  admitted  to  the  benefits\t  of
\npartnership  in respect of acts committed by  the  partners;
\nsub-s. (4) thereof imposes a disability on the minor to\t sue
\nthe  partners for an account or payment of his share of\t the
\nproperty  or  profits of the firm, save\t when  severing\t his
\nconnection with the firm.  This sub-section also assumes the
\nexistence of a firm from which the minor seeks to sever\t his
\nconnection by filing a suit.  It is implicit in the terms of
\nsub-s.\t(5)  of\t s.  30 of  the\t Partnership  Act  that\t the
\npartnership  is\t in  existence.\t  A  minor  after  attaining
\nmajority  cannot elect to become a partner of a\t firm  which
\nceased\tto exist.  The notice issued by him also  determines
\nhis  position  as  regards  the\t firm.\t Sub-s.\t (7)   which
\ndescribes  the\trights\tand  liabilities  of  a\t person\t who
\nexercises  his option under sub-s. (5) to become  a  partner
\nalso  indicates\t that  he is inducted from that\t date  as  a
\npartner\t of  an\t existing  firm\t with  co-equal\t rights\t and
\nliabilities along with other partners.\tThe entire scheme of
\ns. 30 of the Partnership Act posits the existence of a\tfirm
\nand negatives any theory of its application to a stage\twhen
\nthe  firm  ceased to exist.  One cannot become or  remain  a
\npartner of a firm that does not exist.\n<\/p>\n
It  is common case that the first respondent became a  major
\nonly after the firm was dissolved.  Section 30 of the
\n\t\t\t    239<\/span>
\nPartnership  Act, therefore, does not apply to him.   He  is
\nnot  a\tpartner\t of the firm and, therefore,  he  cannot  be
\nadjudicated  insolvent for the acts of insolvency  committed
\nby respondents 2 and 3, the partners of the firm.  The order
\nof the High Court is correct.\n<\/p>\n
In the result, the appeal fails and is dismissed with costs.
\nAppeal dismissed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Shivagouda Ravji Patil And Others vs Chandrakant Neelkanth Sedalge … on 8 May, 1964 Equivalent citations: 1965 AIR 212, 1964 SCR (8) 233 Author: K Subbarao Bench: Subbarao, K. PETITIONER: SHIVAGOUDA RAVJI PATIL AND OTHERS Vs. RESPONDENT: CHANDRAKANT NEELKANTH SEDALGE AND OTHERS DATE OF JUDGMENT: 08\/05\/1964 BENCH: SUBBARAO, K. BENCH: SUBBARAO, […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-61242","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nShivagouda Ravji Patil And Others vs Chandrakant Neelkanth Sedalge ... on 8 May, 1964 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/shivagouda-ravji-patil-and-others-vs-chandrakant-neelkanth-sedalge-on-8-may-1964\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shivagouda Ravji Patil And Others vs Chandrakant Neelkanth Sedalge ... on 8 May, 1964 - 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